Smith and Marx: A Worldview of Difference
Global History and Geography II
Name: ______________________________
E. Napp
Date: ______________________________
Adam Smith (1723-1790) was a Scottish philosopher. In
1776, he published An Inquiry into the Nature and Causes of
the Wealth of Nations.
Examining economic freedom and markets, Smith wrote
about the role of supply and demand in determining prices
and the principles of self-interest and competition in ensuring
the production of goods. Smith’s book is still studied by
Economists today.
Questions:
1- Who was Adam
Smith?
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2: What book did he
write?
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3: When was his
book published?
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4: What is a
market?
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5: What determines
price in a market?
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6: What ensures the
production of goods
in a market?
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7: Who still studies
Smith’s book?
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Smith strongly believed that governments should never
interfere or regulate markets because markets ultimately fix
themselves. The principles of supply, demand, self-interest,
and competition fix markets. This idea that government
should not intervene in a market is called Laissez-faire. It is a
French term that means “let them do as they please.”
Quote:
“It is not from the benevolence of the butcher, the brewer, or
the baker, that we expect our dinner, but from their regard to
their own interest.” ~ Adam Smith
8: What should governments never do?
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9: Why should governments never do this?
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10: Define Laissez-faire.
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11: Why does the baker bake bread?
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12: What is the name of an economy that does not have
government intervention?
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13: What are the advantages and disadvantages of an
economic system without government intervention?
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1- Who was Karl
Marx?
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2- What did he write?
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3- Who was Marx’s
coauthor?
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4- When did Marx
publish The
Communist
Manifesto?
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5- Who were the
proletariat?
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6- Who exploited the
proletariat?
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7- How were the
proletariat
exploited?
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Karl Marx (1818-1883) was a philosopher. He cowrote and published The Communist Manifesto with
Friedrich Engels in 1848. According to Marx and
Engels, capitalists exploited or mistreated workers.
However, workers created the capitalists’ wealth and
therefore, workers, not capitalists, should control the
factors of production. Workers needed to unite and
overthrow their capitalist overlords. Once the
workers led a violent revolution, a dictatorship of the
proletariat or workers would rule. The dictatorship
would control all the factors of production. Private
property would be abolished. All wealth would be
shared equally. The dictatorship would make all
economic decisions.
The last lines of The Communist Manifesto:
“Let the ruling classes tremble at a communist
revolution. The proletarians have nothing to lose but
their chains. They have a world to win.
Proletarians of all countries unite!”
8- According to Marx, what did workers need to do?
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9- What would happen after the workers’ actions?
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10- What is the name given to an economy where the
government makes all economic decisions?
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11- According to Marx, who should own the factors
of production?
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12- According to Marx, how is wealth distributed in
a communist society?
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13- According to Marx, why should workers unite?
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1. Which written work criticized the
capitalist system during the Industrial
Revolution?
(1) Communist Manifesto by Karl Marx and
Friedrich Engels
(2) “White Man’s Burden” by Rudyard
Kipling
(3) The Wealth of Nations by Adam Smith
(4) The Origin of Species by Charles Darwin
2. Which characteristic is associated with an
economy based on the principles of laissezfaire?
(1) prices based on supply and demand
(2) production quotas established by the
central government
(3) distribution of goods determined by the
customs of a traditional society
(4) some goods exchanged for other goods of
equal value
3. In The Communist Manifesto, Karl Marx
and Friedrich Engels expressed the idea that
(1) religion should be the most important
factor in society
(2) power should be determined by a
person’s wealth
(3) profits from work should belong to the
workers
(4) supply and demand should control prices
4. Adam Smith would most likely agree with
which statement?
(1) Revolution is the only solution to
economic problems.
(2) Five-year plans are necessary in order to
industrialize.
(3) All nations would benefit from an
agricultural economy.
(4) Government should follow a laissez-faire
policy.
Base your answer to question 5 on the
passage below and on your knowledge of
social studies.
. . . The need of a constantly expanding
market for its products chases the
bourgeoisie over the whole surface of the
globe. It must nestle everywhere, settle
everywhere, establish connections
everywhere. . . .
— Karl Marx and Friedrich Engels
5. Which historical event do Marx and
Engels believe
created the situation described in this
passage?
(1) Cold War
(2) World War I
(3) Russian Revolution
(4) Industrial Revolution
6. Karl Marx predicted that laissez-faire
capitalism would result in
(1) a return to manorialism
(2) a revolution led by the proletariat
(3) fewer government regulations
(4) an equal distribution of wealth and
income
7. Base your answers to questions 7 on the
speakers’ statements below and on your
knowledge of social studies.
Speaker A: Government should not interfere
in relations between workers and business
owners.
Speaker B: The workers will rise up and
overthrow the privileged class.
Speaker C: Private property will cease to
exist. The people will own the means of
production.
Speaker D: A favorable balance of trade
should be maintained by the use of tariffs.
7. Which two speakers represent Karl
Marx’s ideas of communism?
(1) A and B (3) B and D
(2) B and C (4) C and D
Word Bank:
Adam Smith, Karl Marx, Free Market, Command, Private Property, Revolution,
Dictatorship, Laissez Faire, Supply, Demand, Market, Supply and Demand, Friedrich
Engels, Self Interest, Chains, Soviet Union
The Free Market
What is a market?
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Why do markets exist?
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Give examples of three different markets:
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Why do markets function efficiently?
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Define Self-interest:
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Give two examples of self-interest:
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Define economic competition:
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Give two examples of how competition benefits consumers:
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Therefore, a free market economy is an economic system based on voluntary exchanges in
the market!
Define incentive.
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List two advantages of the free market:
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List two disadvantages of the free market:
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What is the greatest advantage of the free market?
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A Centrally Planned Economy
What was the first country to experience a communist revolution?
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When did that country experience a communist revolution?
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Is that country still communist today?
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Why?
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Who wrote The Communist Manifesto?
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Describe the society this book wanted to create?
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Remember the Three Key Economic Questions? List them:
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Who answers these questions in a centrally planned economy?
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Why?
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What goals are addressed in a centrally planned economy?
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Let’s Review:
In a centrally planned economy, who decides what goods will be produced?
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In a centrally planned economy, who decides how these goods will be produced?
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In a centrally planned economy, who decides who will get these goods?
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